E-mail boxes were flooded with deals from top retailers this Cyber Monday, with 81 percent of all companies in the category sending at least one promotional message this weekend. So far, U.S. shoppers have proven game to the specials they’re being offered, with Americans spending over $52 billion on holiday shopping this past weekend. Many retailers and the National Retail Federation itself had expected softer results, but it seems consumers had trouble resisting the deals on items from clothing to consumer electronics for fear that such discounts wouldn’t return again. Some 226 million shoppers were estimated to have visited stores this weekend, up from 212 million last year when consumer confidence was actually higher. Cyber Monday looks to be perpetuating that momentum as shoppers flock to purchase items from clothing to computers.
Among the top items being snapped up on Cyber Monday have been tablets and smart phones as online electronic sellers from Amazon (AMZN) to Philips (PHG) compete with brick and mortar and each other for the lowest prices. Deeper and deeper discounts are being offered online and e-tailers are being predicted to rake in $1.2 billion today, according to the market research firm Comscore, as 13 percent more people say they will shop online.
E-tailers have been looking to poach business from brick and mortar locations by offering such equalizers as free shipping, while rivaling or exceeding discounts. By promoting these deals via promotional emails, retailers have succeeded in enticing online shoppers today in record numbers while reprising its role as the top day of the year for online promotional emails for the fourth year running. Among the other elements drawing consumers into online shopping on Cyber Monday are unique site wide deals being offered in categories from apparel to technology. While Black Friday tends to push promotions on in-demand or selected items, retailers from J. Crew to Barnes & Noble (BKS) and American Eagle (AEO) are pushing deals on every item being sold on their sites.
The dramatic discounts appear to be more encompassing than ever before and it will be interesting to see how it will affect the bottom line of those companies offering the most significant price slashes. Some predict that people are simply spending more this year, while others believe these days are conditioning customers to spend only when extreme deals are being offered, forwarding a trend that began with the increasing prevalence of group coupon sites. Whatever the outcome in terms of how cyber Monday discounts will impact earnings and consumer behavior for the remainder of the holiday season, it will be best observed among the retailers that seem to be embracing the new discount culture the most.
Among these retailers is Ann Taylor (ANN), whose Loft spin-off is giving consumers 50 percent off all items being sold online in addition to free shipping. Among tech shillers, Philips is offering 30 percent on purchases over $100 as well as free shipping, helping to move in demand electronics from Kindle Fires to iPads at a rate even faster than usual. The ailing Barnes& Noble is offering 30 percent off everything with 50 percent off books on the NYTimes Best Sellers list. Gap (GPS) and its brands from Banana Republic to Old Navy, will also be offering 30 percent off across the board. Gap has been struggling to move items off shelves in recent seasons making the outcome of Cyber Monday sales all the more telling of new trends within consumer discretionary spending.
Investors seem to be betting on the notion that the deepest discounters will have the strongest profits this holiday season, bidding up shares of those companies, from American Eagle to Gap, that are working hardest to encourage customers to their sites today.